The market has been cruel to most growth stocks in recent weeks, nipping the early summertime rally in the bud. With Wall Street skeptical of many of the fastest-growing names, some investments are still clawing their way back from earlier lows.
Shares of Celsius Holdings (CELH -0.04%) and fuboTV (FUBO -3.50%) have more than doubled since their earlier lows. Let's take a closer look at why these are two sizzling stocks that you may want to check out despite their recent rallies.
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1. Celsius Holdings
It's not just the beverages at Celsius that are sparkling these days. The stock is up 171% since bottoming out four months ago, hitting a fresh 52-week high just three weeks ago. The distributor of canned functional beverages makes an eyebrow-raising promise, that they help drinkers burn calories by increasing near-term metabolism rates, but they've been a gym staple for years and are going mainstream.
Investors with a need for speed will find it in Celsius Holdings. Revenue soared 137% to $154 million in its latest quarter, up a scorching 171% if you focus on North America. Net income is growing even faster, up twelvefold to $9.2 million. This isn't necessarily a bottom-line growth story at this stage in the company's growth, but this does happen to be the third straight quarter in which profit has soundly exceeded expectations.
Momentum has been building for Celsius. Growth has accelerated even through the darkest stretches early in the pandemic:
- 2019: 43% revenue growth
- 2020: 74% revenue growth
- 2021: 140% revenue growth
- 2022: 150% revenue growth through the first half of the year
Growth will likely slow at this point, but the runway for market-thumping gains is still long. Earlier this summer, Celsius struck a deal with PepsiCo (PEP 3.62%). The pop star made a sizable investment in Celsius in exchange for an 8.5% stake, a seat on the board, and distribution partner rights. It's a big win for Celsius, especially given its recent shortcomings overseas. PepsiCo should help boost the brand internationally, taking the already successful company to a higher level.
2. fuboTV
Go back to its peak in late 2020, and fuboTV is a colossal dud for investors. Shares of the live TV streaming service have plummeted 92% since its all-time high. Draw the starting line a little closer, and fuboTV has been a rising star this summer in a world of cascading growth stocks. The stock has more than doubled -- up 121% -- from the all-time low it set just two months ago.
Revenue climbed 70% to $221.9 million in fuboTV's latest report. It's up to 1.3 million subscribers, growing quickly as folks cutting their cable and satellite television plans turn to live TV streaming services to give them access to the live channels they were used to getting before. It's not cheap. North American subscribers are paying a monthly average of $64.51 for the service, and fuboTV is ringing up another $7.25 a month in ad revenue per user on top of that.
The platform is hoping to stand out for sports fans, as more than three dozen of its channels are popular live sports networks from around the world. It's a tall task in a world of larger streaming service stocks, but fuboTV is finding its audience.
Things aren't perfect at fuboTV. Live TV streaming services have to deal with rising content costs for the channels they carry, and fuboTV itself offers almost 300 different live channels on its priciest tier. It did post a smaller-than-expected loss in its latest quarter, but the red ink isn't going away anytime soon. It doesn't help that fuboTV also lowered its full-year revenue and subscriber growth guidance last month. However, investors began to rally behind the stock after it announced it was exploring strategic opportunities for its wagering business.
Because it's a sports-centric platform, it made sense to investors two years ago when fuboTV started making moves to offer gambling opportunities for its subscribers. The sportsbook hook was what drove the stock to its frenzied peak during the 2020 holiday season. Reality is sinking in. There are a lot of regulatory hoops to jump through to make that business work, and fuboTV is a small fish in shark-infested waters. Seeking out a partner is the smart call, and at the very least, it should improve its bottom line.
